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Green Steel Market Poised for Strong Growth fuelled by Stringent Emission Regulations"

Green Steel Market Poised for Strong Growth fuelled by Stringent Emission Regulations"

The global green steel market is rapidly gaining momentum as steel producers are increasingly focusing on reducing carbon emissions from steelmaking processes. Steel production is a highly energy and emission intensive industry. Adoption of green steel production methods that rely on clean energy sources and carbon capture technologies can help lower the carbon footprint of the steel sector significantly. Implementing green technologies allows steel manufacturers to align their operations with global decarbonization goals and comply with increasingly stringent climate policies and emission regulations.

The Global green steel market is estimated to be valued at US$ 117.13 billion in 2024 and is expected to exhibit a CAGR of 60% over the forecast period of 2024 to 2031.

Green Steel Market Demand production accounts for around 8% of direct CO2 emissions from fuel combustion worldwide. Transitioning to renewable energy-powered electric arc furnaces, hydrogen-based direct reduction processes and carbon capture utilization and storage are some of the prominent strategies adopted by major steelmakers to produce low-carbon green steel.

Key TakeawaysKey players operating in the green steel market are Ansteel Group, ArcelorMittal, Boston Metal, China Baowu Steel Group and HBIS Group. These companies are investing heavily in developing innovative green steel production methods.

There is a growing market opportunity for recycled and low-carbon steel as infrastructure development and manufacturing sectors are aiming for net-zero targets which is driving increased adoption of green materials. Countries around the world are also offering subsidies and tax incentives to support local green steel production capacities.

Major steelmakers are expanding their green steel production globally to capture the growing worldwide demand. Companies are setting up industrial-scale green steel plants internationally powered by renewable energy with an aim to decarbonize steelmaking and gain a competitive edge in global export markets.

Market Drivers

Stringent emission regulations: Tougher emission norms by regulatory bodies like EU and China to cut industrial CO2 are driving steel producers to adopt low-carbon technologies for compliance.

Growing customer preference: Infrastructure developers and manufacturing companies are increasingly procuring green materials to meet their own ESG commitments which is raising demand for green steel.

Cost competitiveness: Use of renewable electricity and hydrogen as reducing agents can potentially make green steel production competitive or cheaper than traditional coal-based routes on lowered energy costs in the long-run.

Market Restrains

High capital requirements: Setting up carbon capture facilities or converting to hydrogen direct reduction requires massive capital investments which are challenging for integrated steelmakers.

Technological challenges: Scaling up innovative green production methods to commercial and industrial levels presents technical hurdles around process optimization, infrastructure and skills.

Intermittency of renewables: Reliable round-the-clock power supply needs to be ensured for continuous steel plants which remains an issue with intermittent solar and wind energy sources.

Segment Analysis

The Green Steel Market Analysis is segmented into hydrogen reduced iron, electricity reduced iron, carbon capture and storage segments. Among these, the hydrogen reduced iron sub-segment dominates currently with around 60% of total market share. This is because hydrogen is considered as one of the most effective means to produce green steel with near-zero carbon emissions. The use of hydrogen allows steel mills to replace coking coal with hydrogen and directly reduce iron ore to iron in a solid-state process without melting scrap or direct reduced iron. This helps cut down carbon emissions significantly during the steelmaking process.

Global Analysis

Regionally, Europe is expected to remain the fastest growing as well as the largest market for green steel during the forecast period. Strict environmental regulations and carbon neutral goals determined by EU such as reducing 55% emissions by 2030 compared to 1990 levels are driving the growth of green steel market in the region. The region accounts for around 50% of global electrolysis capacity and hydrogen infrastructure. This along with supportive government policies and investments into green hydrogen projects makes Europe an attractive market. Meanwhile, the Asia Pacific region is also expected to witness significant growth, led by China, Indonesia and Australia due to increasing focus on developing a green hydrogen economy and adopting low carbon technologies for steel production.

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About Author:

Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc. (https://www.linkedin.com/in/money-singh-590844163)

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